Gold Price Forecast: Nears Key Resistance, but Direction Remains Uncertain

Despite the potential for gold to head into a deeper bearish pullback it continued hold onto recent gains on Tuesday and broke out above Monday’s high. Trading continues near the highs of the day at $2,922, at the time of this writing and gold looks likely to close near the highs of the day. Furthermore, Monday’s high was at $2,918, and Tuesday’s closing price may occur above that price level thereby confirming a potential one-day bullish reversal.

It would follow a successful test of support at the 50% retracement from last week’s high. Moreover, the 20-Day MA is at $2,912 and gold looks likely to end the day back above it. These are short-term signs of strengthening that could lead to higher prices if gold continues to show signs of strengthening.

Six Day Narrow Price Range

Gold has been moving relatively sideways for the past six days, following a test of resistance around the 78.6% retracement level at $2,930 last week. Last week’s high was $2,930 and it established a lower swing high relative to the recent new record high of $2,956 reached two weeks ago. This means that a bullish breakout above $2,930 could see a spike in demand as the record high would be next in line to be challenged.

Higher targets for gold include the completion of a rising ABCD pattern at $2,974. But the pattern needs to see a rise above last week’s high before it becomes valid. A little higher is a long-term target. The 300% extension of a retracement measuring the March 2022 bearish correction points to potential resistance around $2,982.

Gold Could Go Either Way

Key near-term support is at $2,880 as a drop below that price level before a rise above last week’s high, shows a likely continuation of the bearish correction that followed the recent record high. Gold closed the week with a bearish reversal weekly pattern, ending in the lower third of the trading range. It showed the potential for a deeper bearish pullback than that what has been seen so far. The 50-Day MA is the next lower more significant support zone if Monday’s low is busted to the downside.

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